Who disapproves of Obamacare?

by on December 18, 2013 at 8:40 pm in Current Affairs, Data Source, Law, Medicine | Permalink

I was somewhat surprised by these numbers:

Fifty-three percent of the uninsured disapprove of the law, the poll found, compared with 51 percent of those who have health coverage. A third of the uninsured say the law will help them personally, but about the same number think it will hurt them, with cost a leading concern.

I wonder if any of this poll was conducted in Spanish, and if not whether that would have changed the results.  I found this interesting too:

Of the uninsured who said they were not likely to sign up by the deadline, fully half said it was because of the high cost. Twenty-nine percent said they planned to go without coverage because they object to the government’s requiring it, and 11 percent said they did not need health insurance.

And this:

Seventy-seven percent of the uninsured said they disapproved of the mandate, compared with 65 percent of those who already have health insurance.

8 December 18, 2013 at 8:49 pm

Clinton started using the huge uninsured figure, but a huge chunk of them are uninsured by choice. Obviously people who chose not to buy insurance will be the most angry about being forced to buy it. Force everyone to buy auro insurance and the people without it won’t like it either.

aaron December 18, 2013 at 8:57 pm

I’m curious about the rational behind their decision to be uninsured. Are they really gambling, assuming if they get cancer or something that requires expensive treatment they’ll simply go broke or die. Are they freeloading, assuming in the case of a serious illness they’ll get some kind of charity care. Or is it simply an irrational decision that they don’t want to make because of the cost.

john personna December 18, 2013 at 9:03 pm

In these discussions we generally hear from 20-somethings who believe they don’t need health care, but generally all of us (who have lived somewhat longer than that) can name 20-somethings we’ve known who needed a great deal of health care. The age of invulnerability (and pressing status-purchases) meets insurance decision-making.

Bill December 18, 2013 at 9:22 pm

The poor and uninsured receive free care at the ER or free clinics. They probably think they have enough to worry about; free acute care is good enough for them.

aaron December 18, 2013 at 9:36 pm

Aren’t the poor covered by the Medicaid expansion?

prior_approval December 18, 2013 at 11:58 pm

‘receive free care at the ER’

No – they are charged. It is simply that it is illegal for care to be refused in an ER (thanks to a law signed by that noted socialized medicine tax raiser Reagan). And of course, it is impossible for those with no money to pay. But the care is anything but free.

dead serious December 19, 2013 at 7:27 am

You’re arguing a distinction without a difference. It ends up being free to the poor person: you can’t get blood from a stone.

prior_approval December 19, 2013 at 8:13 am

‘It ends up being free to the poor person’

But it is not free – which makes the American system a very strange one, where we provide the most expensive medical care conceivable, handling nothing but acute problems, charging everyone else.

This is not free to anyone, including a poor person who can only get treatment of a condition like diabetes through an emergency room.

XVO December 19, 2013 at 8:39 am

Suppose you don’t want your credit destroyed? I have heard medical bills don’t affect credit, but also heard that it does?

Dan Weber December 19, 2013 at 8:54 am

Medical debt is some of the easiest to negotiate away. Plus bankruptcy disappears from your credit report after 7 years.

I don’t think this is anything like a great solution, mind you, just pointing out the facts.

But the care is anything but free.

Obamacare’s effect on politics is jaw-dropping. Conservatives act like they’ve never encountered this plan before, and progressives start screaming about free-loaders and personal responsibility and “just because the government pays for it doesn’t mean it’s free!” Amazing stuff, really.

john personna December 19, 2013 at 10:19 am

Another sub-thread where we conveniently ignore that we insured have been paying this overhead for years?

Seriously, some of you are presenting it as a FEATURE that I pay for the health care of younger uninsured. And … you don’t like “transfers.” Got it.

TMC December 19, 2013 at 12:02 pm

You are correct, John, all this care had still been paid for in the past. So why has Obamacare affected prices so much. Seems all the extra cost is strictly the deadweight loss of (increased) government involvement.

john personna December 19, 2013 at 12:08 pm

It’s kind of early to make that kind of pronouncement. No one knows the 2014 rate of emergency room defaults. It would take a while, I’d think for the backlog of bad bills to fall out of the system.

jerseycityjoan December 19, 2013 at 5:01 am

There’s lots of unemployed and uninsured people who haven’t seen a doctor in years because they’re afraid of the bills.

If you go the ER, you will get a bill — unless you give a false address and/or aren’t here legally and not in our tax or credit systems. If you qualify for Medicaid, you won’t have to pay. But in most states if you are not dead broke — as in something like $250 in the bank — you don’t qualify for Medicaid. In many to most, single able bodied people don’t qualify for Medicaid, period.

But the free care you describe — really free — isn’t out there. Not at all.

That’s why anybody who can sign up for the Medicaid expansion (which has no asset test) in their state has to be jumping up and down with joy at the thought of finally having coverage.

TMC December 19, 2013 at 12:04 pm

So those who are not receiving care because they have $250 in the bank just leave it there and forego care when they could easily just withdraw it and hold it somewhere else. Sounds unlikely.

chuck martel December 18, 2013 at 9:42 pm

Let’s just say that your health insurance premium is $1000/month. That would add up to $12000/yr. Extend that to ten years, now it’s $120,000. It starts to look like you’re pre-paying for some pretty serious medical care. If during that ten year span the only significant medical issue you have is a broken leg that adds up to $20,000 in expenses, you’ve saved $100,000 by going without insurance and paying out of your own pocket. Nothing too irrational about that line of thinking.

derek December 18, 2013 at 9:48 pm

Especially when that $12k per year if through the exchanges doesn’t get you access to the best doctors or hospitals.

As for the likelihood of a young person needing care, that is a red herring. The motivation for forcing people to buy insurance is to pay for the older folks, not for their own care.

john personna December 18, 2013 at 10:29 pm

Whenever I crash my bike I meet young people in emergency who have done something similarly stupid.

Thomas December 18, 2013 at 11:11 pm

John,

If it worked out that purchasing insurance was an expected gain for the ‘young invicibles':

a. They would purchase it.
b. They wouldn’t be called ‘young invincibles’.
c. ACA wouldn’t rest on the assumption that they would subsidize the rest of us.

On a related note, every time I buy a lottery ticket, I see someone on television who’s won.

john personna December 18, 2013 at 11:28 pm

If people were rational they’d also save for retirement at an honest 20-30% rate. None of these things happen.

john personna December 18, 2013 at 11:40 pm

Though as you say, many of the same people who pass on insurance will buy lottery tickets.

Brian Donohue December 18, 2013 at 11:45 pm

jp, well, we’re at an honest 12.4% just from Social Security, so…

john personna December 18, 2013 at 11:56 pm

So even people below the social security maximum would have to double (match) their social security savings to get there? How many do?

Or is behavioral economics in evidence?

Brian Donohue December 19, 2013 at 12:18 am

20-30% is your number. For low-paid people, Social Security’s regressive benefit formula provides 50% pay replacement.

Brian Donohue December 19, 2013 at 12:19 am

…and yes, Social Security understood the wisdom of behavioral economics before it was fashionable.

john personna December 19, 2013 at 9:54 am

20-30% is the range I’ve picked up from a lot of reading, it is slightly conservative, but only slightly:

Safe Savings Rates: A New Approach to Retirement Planning over the Life Cycle

And seriously, low wage earners can safely retire on 50% of low wages? That implies government supplements before and after, really.

Brian Donohue December 19, 2013 at 10:24 am

When you throw out a number like 30% and call it ‘honest’, a little introspection can take the place of a lot of reading.

You do realize that money saved for retirement isn’t consumed today. And that taxes on earned income are a lot higher than on retirement income. And we’re not talking about around the world trips, just making ends meet. So yeah, 50% is a reasonable target for most people. This is what retirees in flyover America live on today, as shocking as that sounds to an early retired millionaire from Orange County.

If you are familiar with this issue, you would understand that there is wide disagreement on appropriate levels of saving for retirement, and a variety of strategies, such as working a couple extra years, that go a long way toward dealing with this issue in the real world that are already happening.

john personna December 19, 2013 at 10:35 am

So, a thread where we should pretend that America’s “retirement crisis” is a myth? Lovely.

The Retirement Savings Crisis: Is It Worse Than We Think?

Brian Donohue December 19, 2013 at 10:50 am

jp, there are any number of interested parties with a vested interest in stoking a ‘retirement crisis’. I know- I’ve spent my whole career in the retirement business.

Today, 1 in 4 retirees relies on Social Security for virtually all of their retirement income. More than half of retirees rely on Social Security for most of their retirement income. Poverty among the elderly is lower than among the population at large.

I’m not saying there isn’t an issue, but in the scheme of things this is not close to a crisis, ubiquitous hysteria notwithstanding.

Mark Thorson December 18, 2013 at 9:53 pm

It would be prepaying if somehow that $120,000/year was ending up in some account somewhere you could draw from. It doesn’t. If you’re not covered in year 11 and you need medical services, it’s just like you were never covered at all.

john personna December 18, 2013 at 10:27 pm

Median family net worth was $77,300 in 2010.

That says something sad about ability to pay for medical disasters and ability to save.

tim December 18, 2013 at 10:38 pm

$1000/month! What kind of plan is that? That’s more than double a great unsubsidized plan for my family of four through the exchange.

There’s still a ton of FUD out there. I expect these numbers to change drastically over the next two years.

JWatts December 19, 2013 at 12:32 am

Do you realize that there are states where the family plans can easily run around $1,000 per month?

“New City resident Ed Ilarraza wasn’t as fortunate. He found that a mid-level plan for himself, his wife and daughter would cost at least $1,200 per month.”

http://www.lohud.com/article/20131217/NEWS02/312170054/Affordable-Care-Act-overview-Plans-N-Y-exchange-mixed-bag

aaron December 19, 2013 at 12:42 am

JWatts,

The recipient being discussed was a 20-something, not a family of three. The quote is also odd in that he mentioned a “mid-level” plan. Does that mean silver? One of the middle of the range of plans? All the quote really says is he couldn’t afford the particular plan he wanted, which is too bad but hardly evidence that the cheapest plans were $1,000+

JWatts December 19, 2013 at 4:54 am

Who was talking about the cheapest plan?

jerseycityjoan December 19, 2013 at 5:20 am

I can’t figure out how you got a great unsubsidized plan for four for $500 a month. That’s only $6,000 a year.

The really good employer-sponsored family plans run 3-4 times that.

Even at the bronze level, that sounds too cheap to be true.

TMC December 19, 2013 at 12:23 pm

Even the Kaiser estimator put that policy at about 12k a year when I ran it a month ago.

Dan W. December 18, 2013 at 9:47 pm

Aaron,

I am curious how it is possible to say a person is freeloading when he simply chooses to accept a risk. Consider, if a person opts not to insure his house or car is he freeloading? Is the answer no because the person owns his house or car and it is his own foolishness if he loses them? Well then does a person not own the health of his own body? Yet so many, including self proclaimed Conservatives, declare no. That in fact society can dictate a person’s health care.

Freeloading would only occur when a person receive health care AND DOES NOT PAY FOR IT!!!!! In fact the risk of a young person needing medical care costing more than a few ten thousand dollars is very very low. So it appears it is very rational for a healthy person not to buy health insurance, especially if said insurance is overpriced.

If you disagree then please explain if there is any price at which the purchase of health insurance would be an irrational decision.

derek December 18, 2013 at 10:14 pm

I think you are missing the issue, which is that any of these “people who are simply accepting a risk” will indeed receive any urgent medical care that they eventually need via an emergency room, which is subsidized by taxpayers/insurance-holders. Yes, their calculus that they will probably only need a few hundred dollars worth of, say, anti-biotics or something, in a given year is correct, but they are certainly not shouldering the risk of a major accident themselves.

Thomas December 18, 2013 at 11:14 pm

Progressive “Roundabout” behavioral legislation:

Step 1. Legislate into existence a public good
Step 2. Be shocked when public good is used
Step 3. Label anyone who doesn’t adjust their behavior to avoid the public good a freeloader.
Step 4. Legislate avoidance of public good

aaron December 19, 2013 at 12:35 am

Dan W.

They would be freeloading if they were relying on the fact that if they really needed expensive medical they could not afford then others would pick up the tab.

The scenario you presented, where they willingly took the risk and didn’t expect others to cover it, I explicitly listed as a separate possibility before I listed freeloading.

Finch December 19, 2013 at 12:01 pm

Obamacare would have been a lot more reasonable if it had mandated insurance that only covered catastrophic expenses.

JWatts December 19, 2013 at 5:45 pm

“Obamacare would have been a lot more reasonable if it had mandated insurance that only covered catastrophic expenses. ”

Absolutely! No, income redistribution component and mandated high catastrophic coverage with a life time cap.

dead serious December 19, 2013 at 4:49 pm

Hate to point this out chief but I’m guessing that it’s pretty common that a person with a mortgage is required to carry homeowner’s insurance as a condition of the loan. Also, as far as I know, everyone who owns a car is required to carry auto insurance.

The reason why Obamacare makes insurance mandatory is because the government wants to remove the dynamic where uninsured folks treat the ER like a free clinic and the rest of us are subsidizing that with higher premia.

In the end, the people doing the subsidizing are probably going to end up subsidizing it anyway and possibly moreso than we already were.

-a left-leaning dude who hates this plan

TMC December 19, 2013 at 9:44 pm

Buying a house or car is a choice. many people do neither.
Nobody I know had a choice in being born or not.

Doug December 18, 2013 at 9:50 pm

Do you buy insurance for literally every single catastrophe? Do you have volcano insurance? If not, what do you expect to do if the Yellowstone mega-volcano explodes?

For a healthy 25 year old the chance of dying from cancer is 6.6 out of 100,000 per annum. Furthermore chemotherapy treatment only increases survival chance by 2%. (Links below). Overall that means having insurance that covers expensive cancer treatment only decreases the 25 year old’s mortality rate by .132 out of 100,000 per anum.

Almost every single 25 year old would do better by forgoing health insurance that covers chemotherapy and instead using the marginal income to buy a slightly safer car (lower accident rate), or cheer themselves up with a nice dinner with friends (lower suicide rate).

http://www.cancerresearchuk.org/cancer-info/cancerstats/mortality/age/
http://tomdesantohealthcare.blogspot.com/2009/11/freakonomics-of-chemotherapy.html

babar December 18, 2013 at 10:14 pm

but that’s the point. you aren’t likely to need it, so it doesn’t make sense to buy it – but you’re not likely to have money to buy it later in life when you will probably need it. it’s a kind of forced saving, a paying forward for a service to be rendered later, to a future you or to someone like you.

Mark Thorson December 19, 2013 at 1:17 am

Except you’re not paying forward. When you pay for the service and don’t need it, that money is gone. It’s not like it’s being saved in some account somewhere so you can draw on it when you need it. That is not at all how medical insurance works.

If you lose insurance because your employer goes bankrupt or you quit, the cost of getting new insurance is just as though you were never insured. You don’t get any “credit” for the money you (or your employer) paid in. That money is gone.

Thomas December 18, 2013 at 11:19 pm

Yes, Basar, presuming that the program is solvent after the current power-elite croak.
I recall programs like this in the past. Let’s not call this a pyramid scheme, how about a triangle scam?

To the point: Doug uncovers an incredibly germane point: the young are being used to subsidize the old, and there are plenty of risks that aren’t internalized currently. For instance, why shouldn’t residents of coastal areas internalize their risk of exposure to tropical storms? Why is Iowa subsidizing New York City and New Orleans’ hurricane insurance through the Federal Government. After all, those dirty freeloaders are just going to depend on the tax payer when the hurricane inevitably hits them.

dbp December 18, 2013 at 9:53 pm

I was uninsured from age 19-29 and it wasn’t so much a decision as acceptance of reality. I was in and out of college and in and out of minimum wage jobs for that decade. The cost of health insurance would have been far outside of what I could afford so I never considered even looking into it. I suppose the “rationale” was that the chances of getting cancer are pretty low and since it costs more than my income to insure against this possibility there isn’t much point in thinking very deeply about it.

Most of this period was in school and I payed a health fee for what were, at least to me, unclearly defined benefits. I had a roommate who broke his leg and they gave him a cast and crutches, as well as a handicap parking permit , but no bill–so it seemed to be a good value.

ummm December 18, 2013 at 10:18 pm

they have no assets. the govt. cant take what they cant have and nor can they deny healthcare

Michael December 19, 2013 at 10:17 am

The single most mis-understood idea about the uninsured is that they are a static population. The reality is that roughly half of them will have insurance after six months. The long-term static number of uninsured is very small. The primary reason that this group doesn’t have insurance is because they lost their job. They are not “freeloading” so much as they are (rationally) playing the odds that they won’t come down with cancer in the next six months. Older, recently unemployed folks are far more likely to take advantage of COBRA. Combine this simple risk calculation with possibly over-optimistic assumptions about how long it will take them to find a new job and receive insurance.

The calculations are basically the same for college students and recent entrants to the workforce, with only slightly longer time horizons.

8 December 18, 2013 at 10:24 pm

Not having insurance does not make people get sick. From the view of the collective, uninsured healthy people are not a cost risk because the system is already absorbing the full cost of major illnesses. The objective was to increase spending and redistribute costs. It is no different than forcing non drivers to buy insurance to lower car insurance costs for the poor. The govt coyld come up with BS reasons for that as well.

john personna December 18, 2013 at 10:36 pm

I think you were heading towards the idea of “forcing good drivers to buy insurance.”

Everybody thinks they are a good driver, every 20-something thinks he’s invincible.

As I’ve noted, this is the demo that thinks riding a fixie track bike with no helmet is an acceptable risk and fashion statement.

Thomas December 18, 2013 at 11:22 pm

And yet, the 20-somethings are, on average, right. If not, they wouldn’t be being forced to subsidize the insurance of favored groups, John. If they were better off purchasing insurance, there wouldn’t be a mandate.

john personna December 18, 2013 at 11:31 pm

Can you point me to any solid data for why the already low rates for young people should actually be lower?

A lot seems to ride on the phoney idea that young people never use health care. If you go that far then of course paying anything is paying too much.

JW December 19, 2013 at 1:08 am

Every smart person who studies the ACA understands that healthy young buyers of health insurance are being asked to subsidize the old and unhealthy. You may think and argue that this is good policy, but if you don’t admit this fact you are not intelligent and not worth arguing with.

Doug December 19, 2013 at 1:23 am

“A lot seems to ride on the phoney idea that young people never use health care.”

Why is this idea phony? A typical 25 year old has less than 1% the mortality rate of a 65 year old. Furthermore young people die in pretty inexpensive ways (sometimes not involving any healthcare costs), like choking on their own vomit or getting crushed between vehicles. Elderly people die in long, drawn-out, expensive ways like tumors involving hundreds of thousands of dollars in experimental drugs or chronic diabetes involving endless hospitalizations.

I would be shocked if 25 year olds consume healthcare at anything more than 5% the level of 65 year olds. Particularly if you exclude the ones with pre-existing conditions. Yet 65 year olds are paying well less than 20 times the premiums of 25 year olds.

Doug December 19, 2013 at 1:30 am

^
s/65 year old/80 year old/g

john personna December 19, 2013 at 9:57 am

Every 20-something I know does risky sports and gets hurt. Do I hang out with an especially active bunch?

If you don’t like my anecdotes, don’t give me yours, give me the actual payout rate and not the death rate.

Turkey Vulture December 19, 2013 at 10:46 am

This is from 2004, but I doubt young people have started getting hurt in their outrageously dangerous sports at a higher rate recently:

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/

Table 3 in particular:

Annual per Capita Expenditure (life table cohort):
Age 0 = $3,432
Age 20 = $1,448
Age 40 = $2,601
Age 65 = $10,245
Age 85 = $17,071

Annual per Capita Expenditure (survivors):
Age 0 = $2,920
Age 20 = $1,255
Age 40 = $2,601
Age 65 = $7,702
Age 85 = $7,688

bluto December 19, 2013 at 10:54 am

My anecdote is from 20 to 35, I’ve never needed anything more expensive than generic antibiotics, and my family doctor sees me every 5 years, so total payouts over that 15 year period is probably well under $3000, yet my total spending on health insurance is around $200,000 (almost entirely paid by employers–wish I could have gotten a cheaper plan and more of that as salary).

john personna December 19, 2013 at 10:54 am

Those numbers look good for the 3:1 ratio, if you ask me. We are missing the very important 55:65 decade (before Medicare), but it looks possible that for everyone below 65, a 3:1 ratio works.

Turkey Vulture December 19, 2013 at 11:59 am

It looks closer to 5:1, and this isn’t accounting for male/female disparities.

But if 3:1 works as an accurate representation of expected medical expenditures, why do we need that ratio limit to exist as a matter of law?

john personna December 19, 2013 at 12:10 pm

I buy the “theory” that young people become old, and therefore some life-cycle averaging is justified.

TMC December 19, 2013 at 12:31 pm

So make the poorest cohort pay more for care they will not need.
I’m personally headed into the more expense cohort in the next few years, so no skin off my nose, but sometimes there is an issue of fairness involved.

john personna December 19, 2013 at 12:54 pm

There you go again … everyone fortunate enough to “die in bed” needs healthcare, sooner or later. Many young people need it sooner, if not, they’ll most likely need it later.

People flattened when their fixie challenges a delivery truck, less so, it is true.

bxg December 18, 2013 at 11:26 pm

> the system is already absorbing the full cost of major illnesses.

Could you be a bit more precise about what “the system” is, and whatever, on what basis you make this claim. Imagine a poor uninsured cancer patient; do you mean that the system (?) absorbs their costs because people write off any entanglement with this person until they die. (That may be true.) There is clearly no system absorbing the cost of even median-quality medical care for cancel treatment, since they may well not get it. Just let them die, the “full cost” is indeed rather low. Is this low amount what you think is being absorbed?

William Bromberg December 18, 2013 at 10:25 pm

Look, if you are in your 20s and cannot afford health insurance and don’t have it provided for you at your job you most likely have no assets and marginal credit.

So — you have a low likelihood of needing expensive medical care, you have almost ZERO likelihood of needing expensive care which is not emergent and therefore not accessible to anyone (i.e. needing extensive ongoing non-emergent care), and when you get a huge bill, you are judgement proof (even besides the fact that hospitals essentially are prohibited in putting liens on anything if you make a “good faith effort to pay” which in GA the courts have defined as as little as $1/month) and people are surprised when they don’t want to pay for health insurance? Unless you happened to be 1. a street busker who gets hit by a truck the day before your trust fund pays out or 2. poor enough to get subsidies so it’s almost free or 3. chronically ill from childhood, it’s a bad deal.

Which by the way is the set-up for the death spiral.

mavery December 19, 2013 at 10:45 am

So your point is that the penalty for not being insured needs to be higher?

Rick Hull December 19, 2013 at 6:48 pm

I believe he is describing the rationale for those uninsured who disapprove of the mandate. But yes, by all means, the beatings shall continue until morale improves.

William Bromberg December 19, 2013 at 11:20 pm

Well if you want to mandate to actually work it would have to be — but John Roberts gutted that plan when he finagled the bill to make it “legal” by calling the penalty a tax. Remember since at least the stated purpose of a tax must be that it is used to raise revenue and not change behavior, this essentially put a significantly lower limit on the potential tax than that would be necessary to force compliance. This is only made worse by the fact that the IRS is bound not to seek enforcement other than withholding refunds.

gabe December 18, 2013 at 10:28 pm

buying insurance is betting against yourself….only pussies bet against themselves

Turkey Vulture December 18, 2013 at 10:33 pm

Young people are being forced to pay insurance rates out of proportion to their own risk of requiring medical care, with absolutely no promise in return that they will still be able to buy insurance with the same coverage 30 years from now.

Basically, some commenters above and many of those who supported this law based on the premise of needing to force young people to contribute their fair share are thinking that health insurance is like some kind of whole-life insurance policy. But it’s not: we pay a shitload now and no one promises us anything about the future. It’s one last Boomer pillage of the nation’s wealth.

john personna December 18, 2013 at 10:38 pm

Just curious, do young people ever go HIV positive? What does that do to their future medical costs?

JWatts December 18, 2013 at 11:18 pm

Or, do young people ever go without illness for decades? What does subsidizing older peoples medical care do to their budget?

john personna December 18, 2013 at 11:38 pm

I suspect that the “transfer” portion of their bill is much smaller than they think it is. They underestimate their risks, and that is reinforced by insurance foes.

(Foes who probably make sure their own kids have insurance.)

stubbs December 19, 2013 at 12:23 am

Paying anything for health insurance is too much if you cannot spare the money. All this judging the young seems to be coming from people who have plenty of money, like the guy who nonchalantly wrote above about “whenever I crash my bike I meet young people in emergency.”

JWatts December 19, 2013 at 12:34 am

“I suspect that the “transfer” portion of their bill is much smaller than they think it is.”

If that’s the case, then why shouldn’t the older buyers just cover their actual costs and let’s just avoid the whole income transfer scheme.

Dan Weber December 19, 2013 at 8:52 am

As JWatts said, if we wanted to avoid the transfer issue, we could easily avoid it: make age the variable insurance companies are allowed to price on (with community rating), but let them practice complete price discrimination on that variable. There’s no need to debate how much the young “really” cost: the market will rapidly come to that price discovery.

john personna December 19, 2013 at 10:02 am

You keep ignoring that young people use, and often default on, emergency services.

What the heck right, is that now a “feature” of the old system that us insured “transferred” to the irresponsible?

Turkey Vulture December 19, 2013 at 10:37 am

john personna,

Then create a system that selectively targets these young people who use and default on emergency services. Charge them a tax penalty for defaulting, payable over years. That would be a reasonable solution.

Instead, your solution to the existence of some young freeriders is essentially a tax on all young people regardless of whether they are freeriding or not, and the simultaneous transfer of this tax to old people for some unexplained reason.

john personna December 19, 2013 at 10:49 am

First of all, congratulations on recognizing that the problem is people (of all ages) without ability or willingness to pay.

Yes, mandatory universal insurance is one way to ensure that people (of all ages) have an ability to pay.

Could we do much better? I’m sure we could. Most of the OECD countries do better. We are just blocked politically, into a place where we have choices between slightly better and slightly worse.

Harold Lloyd December 18, 2013 at 11:52 pm

http://www.fairfoundation.org/2013photoshoped-to-850.jpg

boohoo degenerates who get aids through mostly voluntary behavior get 33x more funding per patient death than their cancer patient counterparts. cry me a river

prior_approval December 19, 2013 at 12:05 am

‘than their cancer patient counterparts’

Like the lung cancer patients who spent decades engaging in a mostly voluntary behavior? Cry me a river.

See, it is really easy to play this game. Let’s try again – ‘Like those liver patients that need a transplant as a result of mostly voluntary behavior?’

Or this – ‘Those car accident victims that need emergency care through mostly voluntary behavior?’

It really isn’t hard. After all, you already know how to play.

chuck martel December 18, 2013 at 11:14 pm

“Young people are being forced to pay insurance rates out of proportion to their own risk of requiring medical care,”

Ergo it isn’t actually insurance, which is, as in auto insurance, based on the risk profile of the insured. It’s instead a redistribution scheme, or as John Roberts says, a tax, that has nothing to do with your own health and plenty to do with the medical expenses of total strangers. And, as you say, there’s no guarantee that a young person that pays into this system will be able to obtain any benefit in exchange in the distant future.

Thomas December 18, 2013 at 11:25 pm

At best ACA is a whole-life insurance policy* analogue. At worst it is a pyramid scheme, one last effort of the old to suck the blood of the young.

*Whole-life policies are widely considered to be poor investments.

Brian Donohue December 18, 2013 at 11:37 pm

Very well put.

RPLong December 19, 2013 at 8:40 am

+1

And +1000 to your last sentence.

dead serious December 19, 2013 at 5:15 pm

This is a great point.

Someone, I don’t know, maybe a Republican congressidiot back in the 90s when everyone was too busy trying to impeach Clinton, should have suggested mandating health savings accounts and catastrophic plans for everyone rather than mandated insurance.

jay December 18, 2013 at 10:53 pm

I thought Liberals were “pro choice”. What choice do you have when something is mandated?

liberalarts December 18, 2013 at 10:54 pm

I would think that maternity costs are significant for those in their 20s.

Axa December 19, 2013 at 2:25 am

Thanks!!!! It was tiring to read about the only risk for a 20 something is breaking an ankle in a ski resort.

Coming back to reality, median age for first kid is 25 years http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/25/nine-facts-about-marriage-and-childbirth-in-the-united-states/

Cliff December 19, 2013 at 9:24 am

Right, and this is generally a completely predictable expense and therefore should not be covered by insurance at all. But hey, gotta prop up those $3,000 OB bills for 15 minutes watching a baby come out. My wife and I thank the government regulations for showering us with free cash.

Turkey Vulture December 19, 2013 at 10:31 am

An expense that is both foreseeable and a choice. A choice which a good number of people don’t make.

If we as a nation want to subsidize maternity care, then let’s do it outright and put it in the budget. Instead, it’s being done stealthily through insurance mandates. The biggest losers are young, single men.

Roy December 18, 2013 at 11:05 pm

Of the uninsured that I know, and I know quite a few since many of my oldest friends are in the restaurant industry, all but one of them are planning on paying the fine, and the one who is planning on buying insurance has still not done so, even though he is in his 40s and has some medical issues, which he gets treated for at the local free clinic. Granted he is a screw up, but a lot of uninsured people are. Oh and all of these people voted for Obama.

JWatts December 18, 2013 at 11:21 pm

You should remind them to tell their employer to reduce their withholding rate to the amount that would zero it out based on their previous years income. Currently, the IRS is restricted from taking the penalty out of anything except their over payment for the year. So if they don’t have an overpayment, they will avoid the tax. At least in the short term.

john personna December 18, 2013 at 11:59 pm

Perhaps you could give some advice on the best way to default on an emergency bill as well. You know, personal responsibility as understood in 2013.

john personna December 18, 2013 at 11:46 pm

Well, if they pay the fine, then we get a little back for the risk they represent.

Geez, I am reminding above that “the young never use medical care” is a dangerous myth. Restaurants? Of course they are going to emergency.

Turkey Vulture December 19, 2013 at 10:16 am

You seem to be fighting a straw man. The young use medical care. They are just a lot less likely to use it than older people. Their expected expenditures per year (i.e. per insurance term) are much lower than for older people. They are being required, by law, to pay more than their actual expected medical expenditures per year (plus profit and admin costs). They are being forced to subsidize older people. Pointing out that some young people get sick is an absolutely meaningless point. I think you are being intentionally disingenuous.

john personna December 19, 2013 at 10:39 am

I may be fighting a straw man, but one that is walking these threads. Many here have suggested that “the reason” the ACA wants the young to be insured is for the transfers, and that’s not fair because the young don’t need insurance. (See my link at the bottom on the 3:1 rule, and it’s implications after subsidy.)

I think the bottom line might be that a very high earning young person might over pay a smidge, but not the poor young cited as those who can least afford it. They too are beneficiaries.

Harold Lloyd December 18, 2013 at 11:40 pm

healthcare costs $12 for every hour worked in the usa. with that figure in mind, a huge portion of the population is a liability rather than an asset. not a good situation at all

TMC December 19, 2013 at 12:42 pm

Add to the math that you only work for less than half your life.

superflat December 19, 2013 at 12:18 am

hard to believe someone’s really as obtuse as jp seems to be. have the guts to admit what’s going on — a tax on the young to reduce costs for old and some poor — rather than hiding behind the obvious point that some young folk will need insurance (which is irrelevant to whether all young folk should be required to have insurance that costs more than it would in the absence of subsidies to the old and some poor, whether it’s rational for some young folk to decide to forego insurance, etc.). i don’t agree with that position, but it’s defensible, so just be honest and defend it without playing games by quibbling around the margins (i knew one dude once who really regretted not having insurance, which means it like totally makes sense to require everyone to over insure!).

john personna December 19, 2013 at 9:59 am

What I actually said was that the transfer is smaller than people (especially innumerate uninsured) think it is. We know that the young have _lower_ rates of health spending. We know spending takes off later in life, around 50-60. That doesn’t mean that youth rates are zero and that their total premium is “for” a transfer.

john personna December 19, 2013 at 10:07 am

Distributional Implications of Limited Age Bands in Nongroup Health Insurance

Key Finding: Negative effects of a 3:1 band is largely overstated

Turkey Vulture December 19, 2013 at 10:29 am
Turkey Vulture December 19, 2013 at 10:39 am

Really I should have been more particular about who is being screwed over here: young men.

john personna December 19, 2013 at 10:43 am

If young, single, high-earning men have to pay more, that may be painful for them, but I think they are hardly the most “screwed over” in the whole picture. For that you might actually need a debilitating and expensive illness.

kiwi dave December 19, 2013 at 11:26 am

If young, single, high-earning men have to pay more, that may be painful for them, but I think they are hardly the most “screwed over” in the whole picture. For that you might actually need a debilitating and expensive illness. – See more at: http://marginalrevolution.com/marginalrevolution/2013/12/who-disapproves-of-obamacare.html#comments

Fine, as long as you admit that this is a redistribution scheme, and doesn’t reflect the menace of bicycle accidents on 20-somethings. There is an argument to be had on the justice of redistribution or whether compulsory health insurance is a good way to do it, but at least you now seem to admit it’s happening.

john personna December 19, 2013 at 12:11 pm

I accept that part of it is redistribution, but as I’ve said, I think it is a much smaller component than critics claim.

Critics in these very threads want you to think it is all transfer.

john personna December 19, 2013 at 10:42 am

Yeah, an impressive chart, but as the text describes, it is a more complicated situation. In many cases people are getting better policies, and the young people we are talking about (with less than $45K income) are getting subsidies.

TMC December 19, 2013 at 1:00 pm

So the gov gets involved, forces them to do something they don’t want and don’t need yet, then pays for it for them. So the only winners of all this deadweight loss are the administrators of the program. I guess there really is nothing novel about Obamacare.

stubbs December 19, 2013 at 12:34 am

Does anyone see a contradiction in forcing the young to insure so as to have them subsidize others including the elderly, then forcing everyone who works including the young to pay into the medicare system for all of their working lives?

Shane M December 19, 2013 at 12:50 am

My dad just had heart surgery. Got the hospital bill today (facilities only). $213,000 bill, but insurance company pays $39,000 negotiated rate. This may be not be market friendly, but I’d like to see uninsured folks get a bill that’s more in line with what insurance companies pay.

The Anti-Gnostic December 19, 2013 at 7:17 am

Unless they’re millionaires they’re not going to pay a $213,000 bill. This is financial legerdemain by hospitals. Something else is going on but I don’t know what.

Alan Coffey December 19, 2013 at 8:09 am

C-section 10 years ago; totl paid by ins. Co =$6500. ~5 month premiums.

The Other Jim December 19, 2013 at 7:58 am

It surprises you that people who don’t want health insurance, and being forced to buy health insurance, disapprove of Obamacare? Seriously?

This should be very obvious to you. Perhaps you are reading too much Krugman.

bellisaurius December 19, 2013 at 9:32 am

I get the feeling a lot of people don’t quite realize how poor people tend to think. At that point in my life, I would look at my income on month X and go OK, I’m getting all this stuff, and here’s the stuff I’m putting off.

Food, OK. Rent, OK. Gas, phone and elec, OK. What’s left? OK drinking and date money. Anything else? No room to toss fifty bucks in savings. Well, that car repair can wait. I’ll just have to send a card to mom for her birthhday. I think I can go a month before paying the auto insurance… I probably won’t get caught. I can wait a month for the internet, they only shut it off after the third month. Wait… someone wants to take an extra hundred bucks a month from me? Ah, crap. Well, there goes my income tax refund money that I was gonna do that car repair with.

RPLong December 19, 2013 at 10:14 am

Exactly. And then some have the nerve to suggest that this thought process reflects a stress-induced lack of cognitive bandwidth.

bellisaurius December 19, 2013 at 10:31 am

Yeah. Even though I knew it was short sighted at the time, you have to face up to the fact that after you’ve spent money on the things you absolutely need, the next dollar is almost certainly going to something that will give you some sort of pleasure increase/pain mitigation (unless you’re well off enough to know that you’ll be OK in a few months, then it’s easier to ‘suck it up’ for a little while- I see that line of thinking now that I can do it). I still think It’s a reasonably rational choice in that situation, maybe not optimal, but within the limits of what my various biological requirements demand of me.

I forget the book that makes the point, but it’s not that the poor don’t have enough money, it’s that they have too many problems. Health care is just one problem on a long list.

ricardo December 19, 2013 at 10:56 am
bellisaurius December 19, 2013 at 10:59 am

Thank you. It was. One of the more insightful books I think I’ve read on the topic.

chuck martel December 19, 2013 at 9:39 am

Shouldn’t this discussion have taken place five or six years ago? Oh, that’s right, we had to pass it so we could see what was in it.

Rexinder December 19, 2013 at 10:15 am

Who could have guessed that forcing people to buy a product against their will that they can’t afford and/or don’t want would be unpopular?

Who could have guessed?

The Other Jim December 19, 2013 at 5:17 pm

Mitt Romney, for one. Also about 48% of the sentient US population.

But they are all Mormon. Who wants that? Ewwww.

Stan December 19, 2013 at 10:43 am

ER care is not free. Neither is ambulance transfer to or from a hospital. If you incur bills from either service, ER or ambulance, they’ll be turned over to a bill collector if you don’t pay them, and if you don’t pay the bill collector you’ll lose your credit rating. People who’d rather pay the mandate tax than buy health insurance either don’t know this or don’t care.

Michael December 19, 2013 at 11:27 am

Or, are making the rational calculation that the likelihood of them needing ER care in the next six months is surprisingly close to zero, and rationally believe that they’ll have health insurance before then.

Poor people are not stupid. Your policy prescriptions will be much improved if you realize that those you are hoping to regulate are intelligent human beings, trying to make the best decisions with the resources available to them.

Also, it is important to note that this insurance would be much cheaper if all the insurance was required to cover was this critical ER care which you think is so important. It is this administration’s bizarre belief that pricing the supposed beneficiaries out of the market by forcing them to purchase all sorts of care above your critical threshold standard constitutes “helping” them.

Marie December 19, 2013 at 6:22 pm

Yup.

The down side of going uninsured to the ER and getting billed is that you will lose your assets or your credit rating. If you have little of either of those, it would be irrational to spend a substantial amount of money buying health insurance in order to avoid an unlikely event that will result in a bill you won’t be paying anyway.

It may be an unethical decision, of course. Most folks don’t want to leave a bill unpaid. But how many people with means would pay $300 to $1300 a month just to stay on the right side of ethics? Rich people buy insurance not so that they can pay their bills, but so they can pay their bills without becoming poor folks. Poor folks are already poor, so their only incentive to buy insurance is a moral one. And paying in up to 40% of your take home income in the name of doing the right thing is a bit of a stretch for most of us.

This is really basic stuff, people are behaving reasonably and as ethically as they can afford to behave. Any reform that expects people to act against their own interests is not a realistic reform, it’s either a pipe dream or a front for pursuing other goals.

stubbs December 19, 2013 at 7:02 pm

“People who’d rather pay the mandate tax than buy health insurance either don’t know this or don’t care.” Or maybe they pay their bill, like people once did.

chuck martel December 19, 2013 at 10:58 am

“As a people, we have become obsessed with Health.

There is something fundamentally, radically unhealthy about all this. We do not seem to be seeking more exuberance in living as much as staving off failure, putting off dying. We have lost all confidence in the human body.

The new consensus is that we are badly designed, intrinsically fallible, vulnerable to a host of hostile influences inside and around us, and only precariously alive. We live in danger of falling apart at any moment, and are therefore always in need of surveillance and propping up. Without the professional attention of a health-care system, we would fall in our tracks.

This is a new way of looking at things, and perhaps it can only be accounted for as a manifestation of spontaneous, undirected, societal propaganda. We keep telling each other this sort of thing, and back it comes on television or in the weekly news magazines, confirming all the fears, instructing us, as in the usual final paragraph of the personal-advice columns in the daily paper, to “seek professional help.” Get a checkup. Meditate. Jog. Have some surgery. Take two tablets with water. Spring water. If pain persists, if anomie persists, if boredom persists, see your doctor.

It is extraordinary that we have just now become convinced of our bad health, our constant jeopardy of disease and death, at the very time when the facts should be telling us the opposite.”

Lewis Thomas, “A Long Line of Cells”, BMOC, 1990, pg.139.

Thomas was Dean of Yale Medical School and New York University School of Medicine, and President of Memorial Sloan-Kettering Institute.

Marie December 19, 2013 at 6:32 pm

Tolstoy, “The Kreutzer Sonata”

“The supreme poison is the perversion of people, especially of women. One can no longer say now: ‘You live badly, live better.’ One can no longer say it either to himself or to others, for, if you live badly (say the doctors), the cause is in the nervous system or in something similar, and it is necessary to go to consult them, and they will prescribe for you thirty-five copecks’ worth of remedies to be bought at the drug-store, and you must swallow them. Your condition grows worse? Again to the doctors, and more remedies! An excellent business! “

T. Shaw December 19, 2013 at 11:00 am

Six years ago, 80% or 87% of those polled were satisfied with their health care arrangements.

So, progressives decided it needed fixing.

Soon, 80% to 87% will be dissatisfied with their health care arrangements.

So, “Who disapproves . . . ?”

Anybody that doesn’t have a lump of shit for brains, i.e., anybiody that isn’t an obama-worshiping imbecile.

Still have that tingling feeling running up your leg, moron?

mavery December 19, 2013 at 11:19 am

People don’t seem to understand the point of ACA. The point of it was to pass and marginally improve healthcare opportunities for those in the bottom tier of the income. This was largely done by expanding medicaid, but a lot of red state governors managed to partially quash that. The individual mandate and exchanges were designed to bring transparency to an otherwise complicated and difficult-to-understand marketplace, while also providing subsidies to poor folks who didn’t meat the medicaid threshold. Its unclear to me whether the exclusion of age as a factor for pricing was a good idea, but somehow I don’t imagine that if this was changed, very many folks would change their mind about the program.

The biggest potential “win” from Obamacare is getting everyone in the system. Having insurance and a doctor means your medical records exist somewhere. It leads to greater transparency for hospital care pricing. This is almost never discussed.

In all, it’s not a very good system. But its a marginal improvement, and nothing that would’ve actually BEEN a good system was politically acceptable at the time. There are a few things that would improve it straight off. A simple first step would be eliminating the employer mandate in conjunction with the tax benefit for employer provided insurance.

chuck martel December 19, 2013 at 11:33 am

“exchanges were designed to bring transparency to an otherwise complicated and difficult-to-understand marketplace, ” Everything’s much clearer now.

T. Shaw December 19, 2013 at 11:44 am

“the point of ACA” is to devolve (take over Americans’ health care) America into a European-style welfare state.

You people need to stop substituting emotions for data, facts, meaning, truth.

john personna December 19, 2013 at 12:13 pm

Oh gosh, someone said “a European-style welfare state.” I’m so scared now that I can’t think straight, can’t think about rational accounting of health care costs.

Marie December 19, 2013 at 12:41 pm

Don’t discount that the population being addressed here has often had extensive interaction with government programs already. Reference the new marshmallow test.

http://www.slate.com/blogs/xx_factor/2012/10/16/the_marshmallow_study_revisited_kids_will_delay_gratifcation_if_they_trust.html

NateO December 19, 2013 at 6:33 pm

I am 26, healthy, and uninsured. The only doctors I have seen in the last 10 years are the optometrist and dentist (neither of which are “Essential Health Benefits” under the ACA), and I make just enough to not qualify for a subsidy. I am being forced to buy a useless product that is nothing more than a fancy redistribution scheme.

The majority of healthcare spending in the US is done by people with chronic conditions – people who are able to, and who should be encouraged to, shop on the margin for the best care. Instead, the young and healthy are picking up more of the tab, thereby destroying the market incentives that could actually lower prices and improve access.

Yes, it would be wise if I purchased personalized health insurance to protect myself from financial risk in the unlikely event of a catastrophe, but the Essential Health Benefit requirements and single risk pool in Obamacare are ridiculous and counterproductive. I look forward to paying the penalty next year in protest!

jerseycityjoan December 19, 2013 at 7:27 pm

The article at the Times is really worth reading. The results of the poll are all over the place, they really are. If we didn’t know better, we wouldn’t believe that so many contractory views could be held simultaneously by the same people. Clearly confusion reigns. I agree with universal coverage and I am confused and have contradictory and conflicting views myself.

However, one thing did surprise me and I think has important implications for the future:

“In a reflection of how many Americans seem to grapple with conflicting sentiments about the health care law, most respondents — both insured and uninsured — said that it hurts the country when individuals do not have health insurance, even as most voiced opposition to the mandate. In addition, 64 percent of the uninsured and 54 percent of the general public said they thought providing access to affordable health care coverage for all Americans was the responsibility of the federal government.”

That last sentence is a knock-out. More than half the general public thinks making sure people can get healthcare is up to the federal government. Wow. The game has been changed, and I didn’t know it.

mulp December 20, 2013 at 12:50 pm

I can’t figure out why there are no polls that simply ask:

“Should all medical care be free to prevent suffering and death?”

and variants like

“If you do not have insurance or money, should doctors and hospitals refuse to provide medical care if you are suffering and at risk of dying?”

“If an unemployed 55 year old does not have insurance or money, should doctors and hospitals refuse to provide medical care if he is suffering and at risk of dying?”

“If you have received medical care but failed to pay the bills, should doctors and hospitals be able to remove organs from your body to compensate, like auto mechanics can take your car if you fail to pay the auto repair bill?”

Dave Tufte December 23, 2013 at 3:44 pm

I moved out of a coastal state when I left graduate school.
I’ve spent the last 24 years living in flyover states.
I’m not surprised by these numbers at all. Tyler: perhaps you ought to get out more.

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